As a surfer I was interested to see how Quiksilver has filed for Chapter 11 bankruptcy protection in the USA. A once formidable and dominant player in the surf industry, one of the Big 3 – Ripcurl, Quiksilver and Billabong. The Big 3 surf brands have all had their troubles in recent times; Billabong is currently valued at less than 5% of what it was at it’s peak on the share market ($14.06 vs $0.60 today) and Ripcurl has delayed a public float more than 3 times. Without sounding like an armchair expert, this financial outcome for all these brands was clear to see many years ago. The reason I’m not an armchair expert is that I’ve been a customer of theirs since 1985 – which is also how long I’ve been surfing. If anyone ought know about a brand, it’s a person who feeds it – yes, those who spend money on it – the true owners of any brand. And that happens to be me.
So here it is in one single sentence, why the big 3 surf brands are struggling:
They alienated the customers who made them what they are – surfers.
Put in other words, real surfers wouldn’t be caught dead wearing a Quiksilver t-shirt. It basically means you are not a surfer. Once upon a time wearing a surf brand was a clear indication that your surfed. Now it means the opposite. The only surfers who wear surf brands are those who work for them and are sponsored by them. The tribalism that once existed with surf brands has gone out the window with their success. All surfers, me included still buy their surfing equipment, it’s the best money can buy, but it now stops there, our money goes no further into their pockets than that. We buy clothes that are mostly unbranded and are just cool because they look cool. The days of giant logos are over and have been for some time. Seems the Big 3 surf brands didn’t get the memo. But here’s why this results in a financial disaster for these brands. Their infrastructure is set up around the clothing side of their business. Yet, the people buying it simply don’t have the same emotional investment in surfing that real surfers do. So it’s easy for them to lack loyalty and go shopping at Asos, Zara or other fast fashion brands, which are mostly cheaper too.
Just walk into any big surf shop and you’ll see the issue starring you in the face. The store is 90% about fashion and 10% about surfing. A few boards up the back of the store with some wetsuits. Or they’ll be on the untouchable roof like the header pic to this blog entry, an ironic picture indeed. While Ripcurl claims in their advertising that ‘Surfing is everything’ – clearly it is not.
They lost focus on what made them great. I wrote about this inevitability of Quiksilver’s decline here on startup blog back in 2009 when Quiksilver started making bedding & doonas – WTF? Sure, I know they can’t be a giant brand just selling boards and wetsuits, but they did also miss most of the tech pivots available that came with the growth of surfing. Here’s a whole bunch of things Qucksilver, Ripcurl & Billabong could have invested in to enable financial growth without damaging their brands:
Waterproof cameras (We love documenting our surfs – GoPro did it instead!)
Surfing Resorts (Why not own the resorts we surf at? Instead other entrepreneurs did it)
The World Surf League (Where we watch the worlds best compete, instead they ‘pay’ to sponsor events)
Jet Ski’s (Instead specific surf craft got built by other motor companies)
Drones (Instead we buy other brands to film surfing that come from china – where their clothes get made)
I could bore you with another 30 ideas…. but your get the picture. A brands growth should only ever come through things which enhance its core user proposition, not those which opportunistically mortgage the brand. The reason I Included these categories above, is that they are real companies who take money from surfers by facilitating surfing. Something the Big 3 surf brands should have realised many years ago. The only innovation I’ve seen from a surf company in recent years which is great is the Ripcurl GPS watch. The first move into the IoT from a surf player. While other opportunities like 3D printed surf boards and specific board printing printers remain open for entrepreneurs…. Who wants to start that with me?
So the question any brand or startup should ask themselves is this:
Will this revenue source make the people who made us great love us more, or alienate them?